SAN FRANCISCO—Research in Motion Ltd.'s replacement of co-CEOs Mike Lazaridis and Jim Balsillie with Thorsten Heins, formerly one of the handset vendor's two chief operating officers, may give the company a boost, but not enough to stop continued market share loss, according to a Wall Street analyst.
"While the change in management might reinvigorate the employee base, improve execution, or even increase interest from potential acquirers, we maintain our belief the new BB 10 OS will not stem ongoing market share losses to Android and iOS," said Michael Walkley, a technology analyst at Canaccord Genuity, in a report circulated Monday (Jan. 23).
Walkley maintained his firm's "hold" rating on RIM's stock. "With competing OEMs introducing high-end smartphone products on more established software ecosystems and low-cost Android products pressuring RIM’s international sales, we believe sales and earnings will decline," Walkley said.
Lazaridis and Balsillie stepped down Sunday (Jan. 22) after nearly 19 years of leading the Blackberry maker in tandem. RIM's board appointed Heins, who was recommended by Lazaridis and Balsillie as part of a succession plan, according to RIM.
Heins, who joined RIM from Siemens Communications Group in December 2007, said through a statement that he believes the company has tremendous potential.
"Mike and Jim took a bold step 18 months ago when RIM purchased QNX to shepherd the transformation of the BlackBerry platform for the next decade," Heins said. "We are more confident than ever that was the right path. It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today. I share that philosophy and am very excited about the company’s future."
RIM slipped to No. 4 in the world in smartphone sales last year, trailing Apple Inc., Nokia Inc. and Samsung Electronics Co. Ltd., according to market research firm IHS iSuppli. RIM's share of the U.S. smartphone market slipped to about 9 percent in the third quarter of last year from nearly 50 percent two years earlier, thanks to stiff competition from Apple's iPhone and smartphones that run Android, according to the market research firm Canalys.
Jack Gold, an analyst with J. Gold Associates LLC (Northborough, Mass.), echoed Walkley's sentiments, saying the management change in and of itself would not turn the tide in RIM's favor. RIM also must get BlackBerry OS 10 out as quickly as possible, while also making sure that the operating system performs well, he added.
But Gold said he does believe RIM can recover some market share if the company can deliver the new operating system and the PlayBook 2 media tablet in relatively short order. He said he hopes Heins can accelerate the schedule. .
"We do have to remember that BlackBerry is not doing badly in many parts of the world, and the company is still making money, so we have to realize they are not falling into obscurity," Gold said. "So they do have a little time. But obviously, the longer they take for a turn around the more market share they will lose in the U.S.
Gold said RIM also needs to get more aggressive in marketing. He said he believes BlackBerry OS 10 will offer some very compelling features, but the critical test will be execution and how well RIM can get the message out to customers.
Lazaridis also relinquished his position as co-chairman of RIM's board. He assumes the roles of vice chairman of the board and chair of the board's new innovation committee, RIM said.
"There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership," Lazaridis said. Jim and I went to the board and told them that we thought that time was now."
With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, RIM is entering a new phase, Lazaridis said. "We felt it was time for a new leader to take it through that phase and beyond."
Barbara Stymiest, a RIM board member since 2007, was named independent chairman of the board. Prem Watsa, chief executive officer of Fairfax Financial Holdings, was also named to RIM's board, expanding it to 11 members, RIM said. Heins, 54, has 27 years of experience in wireless networks and consumer electronics devices, RIM said. Heins worked at Siemens for 23 years before joining RIM in 2007.
"As a board, we have been impressed with [Heins's] outstanding management skills, his leadership and his accomplishments within the company," Stymiest said.
I have read on a number of sites that the Android development chain is difficult (and with fragmentation, has gotten worse) so an easy route to port (if not run) iOS apps might be RIMM's ticket in that front.
And if they had only waited a year on the tablet ...
hope a COO-made leader will bring better execution, thus quickening the pace of making ideas, designs into products and bringing them to market, there should be a fleet of products to be talked about before the name of RIM becomes a thing of the past
RIM's North American shipment share has dropped along a remarkably straight line from 54% to 13% in the past 10 quarters. Nothing that has been done in that time period seems to have delivered any positive results. The challenge is to ensure that future quarters don't display more of the same. New products or strategies are urgently needed. I wonder if any foreign market results offer any hope or insights into potentially successful alternative niche strategies.
Apple and Android have set the bar for available apps extremely high. The playbook is a nice piece of hardware but the app market is trailing way behind. BB should provide tools to facilitate code transfer to their platform. Otherwise, it's not worth coders' time.
The future of blackberry is relying on the delivery of platforms and apps that are customed to business world and that will help people to get their job done more effectively. In addition, platform security will be a strong selling point. What's your idea?